Exhibit 2.1
PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement (this "Agreement") is made
as of October 30, 2003, by and between Citizens Communications
Company, a Delaware corporation ("Seller"), and Great Bay Hydro
Corporation, a New Hampshire corporation ("Buyer"). Capitalized
terms used herein shall have the meanings ascribed to them in
Article 1, unless otherwise provided.
RECITALS
WHEREAS, Seller owns all of the Assets;
WHEREAS, Buyer desires to purchase, and Seller desires to
sell, the Assets, subject in all respects to the provisions of
this Agreement; and
WHEREAS, concurrently with the execution of this Agreement,
BayCorp Holdings, Ltd., a Delaware corporation and the parent
entity of Buyer, has executed and delivered to Seller the
Guarantee Agreement in the form attached hereto as Exhibit A.
NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as
follows:
ARTICLE 1
DEFINITIONS
Section 1.1 Certain Defined Terms. For purposes of this
Agreement, the following terms have the meanings specified or
referred to in this Article 1 (such definitions to be equally
applicable to both the singular and plural forms of the terms
defined):
"Affiliates" or "Affiliated Entities" - entities shall be
deemed "Affiliated" as to each other to the extent (i) one of the
entities directly or indirectly controls the other, or the direct
or indirect control of one of the entities is exercised by the
officers, directors, stockholders, or partners of the other
entity (whether or not such persons exercise such control in
their capacities as officers, directors, stockholders, or
partners) or (ii) is deemed to be an Affiliate under existing,
statutes or regulations of the SEC.
"Assets" - means (a) all of Seller's hydraulic generating
facilities and dams located in the State of Vermont, being the
Newport Generating Facility Units 1, 2, 3 and 11, the Xxxx
Generating Facility, and the West Charleston Generating Facility
(collectively, the "Hydraulic Generating Facilities"), together
with (i) the Real Property associated with the Hydraulic
Generating Facilities, including the buildings and other
improvements located thereon and approximately 500 acres of
unimproved Real Property located around the Hydraulic Generating
Facilities, (ii) all other tangible personal property located at
the Hydraulic Generating Facilities, including the personal
property and spare parts listed on Schedule 1.1 as updated as of
the Closing Date, (iii) the replacement penstock for the West
Charleston Generating Facility located at Seller's pole yard in
Derby, Vermont, (iv) Easements, Contracts and Consents (to the
extent transferable)
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relating to the Hydraulic Generating Facilities, and (v) the
Seymour and Echo non-power dams that are part of the FERC License
(the "Non-Power Dams"), but only to the extent provided for under
Section 2.4; and (b) the diesel generator sets of Seller located
at the Newport Generating Facility Units 1, 2, and 3 (the "Diesel
Generating Facilities"), together with (i) the Real Property
associated with the Diesel Generating Facilities including the
buildings and other improvements, (ii) all other tangible
personal property located at the Diesel Generating Facilities
including the personal property and spare parts listed on
Schedule 1.1 as updated as of the Closing Date, and (iii)
Easements, Contracts and Consents (to the extent transferable)
relating to the Diesel Generating Facilities.
"Claim Notice" - means a written notice of a claim given by
a party seeking indemnification pursuant to the terms of this
Agreement that specifies in reasonable detail the nature of the
Losses and the estimated amount of such Losses.
"Consent" - means any approval, consent, permit,
ratification, waiver, or other authorization from any Person.
"Contract" - means any agreement, contract, document,
instrument, obligation, promise or undertaking (whether written
or oral) that is legally binding, including Easements.
"Easements" - means all easements, rights of way, permits,
licenses, prescriptive rights and other ways of necessity,
whether or not of record, relating to real property.
"Encumbrance" - means any charge, adverse claim, lien,
mortgage, pledge or security interest.
"Environmental Law" - means any Order or Legal Requirement,
and any judicial and administrative interpretation thereof and
related policies, guidelines and standards, relating to pollution
or protection of the environment and natural resources, including
those relating to (i) emissions, discharges, Releases or
threatened Releases of Hazardous Material into the environment
(including ambient air, surface water, groundwater or land), or
(ii) the manufacture, processing, distribution, use, treatment,
storage, disposal, abatement, removal, remediation, transport or
handling of Hazardous Material each as in effect as of the date
of determination. "Environmental Laws" include the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C.
Section 9601 et seq.), the Hazardous Materials Transportation Act
(49 U.S.C. Section 1801 et seq.), the Resource Conservation and
Recovery Act (42 U.S.C. Section 6901 et seq.), the Federal Water
Pollution Control Act (33 U.S.C. Section 1251 et seq.), the Clean
Air Act (42 U.S. C. Section 7401 et seq.), the Toxic Substances
Control Act (15 U.S.C. Section 2601 et seq.), the Oil Pollution
Act (33 U.S.C. Section 2701 et seq.), the Emergency Planning and
Community Right-to-Know Act (42 U.S.C. Section 11001 et seq.),
the Occupational Safety and Health Act (29 U.S.C. Sections 651 et
seq.) to the extent involving handling of or exposure to
Hazardous Substances, the Federal Insecticide, Fungicide and
Rodenticide Act (7 U.S.C. Section 136 et seq.), the Coastal Zone
Management Act (16 U.S.C. Section 1451 et seq.), the Rivers and
Harbors Act (33 U.S.C. Sections 401 et seq.), the Endangered
Species Act (16 U.S.C. Section 1531 et seq.), the Safe Drinking
Water Act (42 U.S.C. Section 300(f) et seq.), and all other state
laws analogous to any of the above, and any common law doctrine,
including,
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negligence, negligence per se, nuisance, trespass, personal
injury or property damage related to or arising out of the
Release of or exposure to Hazardous Substances.
"Environmental Liability" - means any liability,
responsibility or obligation arising out of or relating to (i)
the presence of any Hazardous Material in the fixtures,
structures, soils, groundwater, surface water or air on, under or
about or emanating from the Assets used, operated, owned, leased,
controlled, possessed, occupied or maintained by Seller, and any
such Hazardous Material emanating to adjoining or other
properties, (ii) the use, generation, production, manufacture,
treatment, storage, disposal, Release, threatened Release,
discharge, spillage, loss, seepage or filtration of Hazardous
Materials by Seller or its contractors from, on, under or about
the Assets used, operated, owned, leased, controlled, possessed,
occupied or maintained by Seller or the presence therein or
thereunder of any underground or above-ground tanks for the
storage of fuel oil, gasoline and/or other petroleum products or
by-product or other Hazardous Material, (iii) the violation or
noncompliance or alleged violation or noncompliance by Seller or
its contractors of any Environmental Law arising from or related
to Seller's or its contractors' conduct, actions or operations or
the use, operation, ownership, lease, possession, control,
occupancy, maintenance or condition of any of the Assets or Real
Property, (iv) the failure by Seller to have obtained or
maintained in effect any certificate, permit or authorization
required by any Environmental Law as a result of Seller's or its
contractors' conduct, actions or operations or the use,
operation, ownership, lease, control, possession, occupancy,
maintenance or condition of Seller's Assets, (v) any and all
Proceedings arising out of any of the above-described matters,
including Proceedings by Governmental Bodies for enforcement,
cleanup, removal, treatment, response, remedial or other actions
or damages and Proceedings by any third Person seeking damages,
contribution, indemnification, cost recovery, compensation or
injunctive relief, and (vi) any and all remedial work and other
corrective action (including investigation or monitoring of site
conditions, or any clean-up, containment, restoration or removal)
taken by, or the costs of which are imposed upon Seller arising
from any of the above described matters.
"FERC" - means the Federal Energy Regulatory Commission, and
any successor agency under the Federal Power Act.
"FERC License" - means the existing license issued by FERC
on November 6, 1963, relating to the operation of the Hydraulic
Generating Facilities and the new license which may be issued
based upon the application for a new license for the Xxxxx River
Project, filed with FERC in December, 1991 and the application to
amend the license for the Xxxxx River Project, filed with FERC on
June 16, 1999.
"Final Order" - means an action by a Governmental Body as to
which (i) no request for stay of the action is pending, no such
stay is in effect and if any time period is permitted by statute
or regulation for filing any request for such stay, such time
period has passed, (ii) no petition for rehearing,
reconsideration or application for review of the action is
pending and the time for filing any such petition or application
has passed, (iii) such Governmental Body does not have the action
under reconsideration on its own motion and the time in which
such reconsideration is permitted has passed, and (iv) no appeal
to a court, or a request for stay by a court of the Governmental
Body's action is pending or in effect and the deadline for filing
any such appeal or request has passed.
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"Governmental Body" - means any of the following that
possesses competent jurisdiction:
(a) federal, state, county, local, municipal or other
governmental body;
(b) governmental or quasi-governmental authority of
any nature (including any governmental agency, branch,
department, official or entity and any court or other tribunal);
or
(c) any governmental body entitled to exercise any
administrative, executive, judicial, legislative, police,
regulatory or taxing authority or power of any nature.
"Hazardous Materials" - means any waste or other chemical,
material or substance that is listed, defined, designated, or
classified as, or otherwise determined to be, hazardous,
radioactive, toxic, or a pollutant or a contaminant, or words of
similar import, under or pursuant to any Environmental Law,
including any admixture or solution thereof, and specifically
including oil, natural gas, petroleum and all derivatives thereof
or synthetic substitutes therefor, asbestos or asbestos-
containing materials, any flammable substances or explosives, any
radioactive materials, any toxic wastes of substances, urea
formaldehyde foam insulation, toluene or polychlorinated
biphenyls, and any other chemicals, materials, wastes or
substances, the exposure to or treatment, storage,
transportation, disposal or Release of which is prohibited,
limited or regulated by any Environmental Law.
"Interest Rate" - means five percent (5%) per annum.
"Knowledge" - means, with respect to Seller, the actual
knowledge of Seller's Vice President and General Manager, Vermont
Electric Division (Xxxx Xxxxxxx), the Systems Operations Manager
of the Vermont Electric Division of Seller (Xxxxx Xxxxx), and the
System Dispatcher responsible for hydro diesel maintenance (Xxxx
Xxxxxx), or their respective successors.
"Legal Requirement" - means any federal, state, county,
local, municipal, foreign, international, multinational,
administrative, or other governmental Order, constitution,
statute, ordinance, adopted code, principle of common law,
regulation, rule, directive, approval, notice, tariff, license,
franchise agreement, statute or treaty.
"Losses" - means all claims, losses, liabilities, causes of
action, costs and expenses (including, without limitation,
involving theories of negligence or strict liability and
including court costs and reasonable attorneys' fees and
disbursements in connection therewith).
"Material Adverse Effect" - means any change, event,
occurrence or condition that is, or would be, materially adverse
to the operation or condition of Assets, taken as a whole. For
purposes of this Agreement, a change, event, occurrence or
condition shall not constitute a Material Adverse Effect (i) if
it arises from general business, economic or financial market
conditions, from conditions generally affecting the hydroelectric
industry or from the transactions contemplated by this Agreement,
(ii) to the extent that the Seller may realize the benefit of
insurance maintained by Seller or to the extent that Seller or
Buyer may receive or recover payments in respect of such
occurrence from any other source (whether in a lump sum or stream
of payments), (iii) if it arises from retiring and/or dismantling
any
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of the Hydraulic Generating Assets pursuant to any permits,
licenses or Orders, or (iv) if it arises from dismantling any of
the dams which constitute part of the Hydraulic Generating
Facilities pursuant to any permits, licenses or Orders.
"Order" - means any award, decision, injunction, judgment,
order, writ, decree, ruling, subpoena, or verdict entered,
issued, made, or rendered by any court, administrative agency,
other Governmental Body, or by any arbitrator, each of which
possesses competent jurisdiction.
"Organizational Documents" - means the articles or
certificate of incorporation and the bylaws of a corporation or
the comparable organizational and governing documents of other
Persons.
"Permitted Encumbrances" - means any of the following:
(a) mechanics', carriers', workers' and other similar
liens arising in the ordinary course of business and which in the
aggregate are not substantial in amount and do not interfere with
the present or intended use of the Assets to which they apply;
(b) liens for current Taxes and assessments not yet
due and payable;
(c) with respect to any parcel of Real Property, usual
and customary nonmonetary Encumbrances, covenants, imperfections
in title, Easements, restrictions and other title matters
(whether or not the same are recorded) that do not and will not
materially interfere with the operation of the Assets currently
conducted on the Real Property or result in any absence, loss or
reversion of, or inability to transfer, title, or any termination
of the right to use the Real Property;
(d) all applicable zoning ordinances and land use
restrictions;
(e) with respect to any Asset which consists of a
leasehold or other possessory interests in real property, all
Encumbrances, covenants, imperfections in title, Easements,
restrictions and other title matters (whether or not the same are
recorded) to which the underlying fee estate in such real
property is subject that do not currently interfere materially
with the operation of the Assets currently conducted on such
property; and
(f) any other Encumbrances, Contracts, obligations,
defects or irregularities of any kind affecting the Assets that,
(i) are disclosed in Schedule 5.5, (ii) individually and in the
aggregate, are not reasonably likely to have a Material Adverse
Effect, or (iii) will be terminated, released or waived on or
before the Closing Date.
"Person" - means any individual, corporation (including any
nonprofit corporation), general or limited partnership, limited
liability company, joint venture, estate, trust, association,
organization or Governmental Body.
"Proceeding" - means any claim, action, arbitration,
hearing, litigation or suit commenced, brought, conducted, or
heard by or before, or otherwise involving, any Governmental Body
or arbitrator.
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"PUHCA" - means the Public Utility Holding Company Act of
1935, as amended, or any successor law, and regulations and rules
issued by the SEC pursuant to that act or any successor law.
"Real Property" - means all real property owned by Seller or
an Affiliate of Seller, and included among the Assets, together
with all interests in real property (including Easements) used or
held for use by Seller in the operation of the Assets.
"Related Documents" - means any Contract provided for in
this Agreement to be entered into by one or more of the parties
in connection with the transactions contemplated by this
Agreement.
"Release" - means any presence, emission, dispersal,
disposal, spilling, leaking, emitting, discharging, depositing,
pumping, pouring, escaping, leaching, dumping, releasing or
migration into the indoor or outdoor environment (including the
abandonment or disposal of any barrels, containers or other
closed receptacles containing any Hazardous Materials), or in,
into or from any Asset, including the movement of any Hazardous
Materials through the air, soil, surface water, groundwater or
property.
"Representative" - means with respect to a particular
Person, any director, officer, employee, agent, consultant,
advisor, or other representative of such Person, including legal
counsel, accountants, and financial advisors.
"SEC" - means the United States Securities and Exchange
Commission or any successor agency.
"Tax" - means any tax (including any income tax, capital
gains tax, value-added tax, sales and use tax, franchise tax,
payroll tax, withholding tax or property tax), levy, assessment,
tariff, duty (including any customs duty), deficiency, franchise
fee or payment, payroll tax, utility tax, gross receipts tax or
other fee or payment, and any related charge or amount
(including, any fee, penalty, interest or addition to tax),
imposed, assessed or collected by or under the authority of any
Governmental Body.
"Tax Return" - means any return (including any information
return), report, statement, schedule, notice, form, or other
document or information filed with or submitted to, or required
to be filed with or submitted to, any Governmental Body in
connection with the determination, assessment, collection, or
payment of any Tax or in connection with the administration,
implementation, or enforcement of or compliance with any Legal
Requirement relating to any Tax.
Section 1.2 Other Defined Terms. In addition to the terms
defined in Section 1.1, certain other terms are defined elsewhere
in this Agreement as indicated below and, whenever such terms are
used in this Agreement, they shall have their respective defined
meanings.
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Term Section
Xxxx of Sale 8.1(a)
Buyer Indemnitees 12.1
CERCLA 5.11(g)
Closing 8.1
Diesel Generating Facilities 1.1
Closing Date 8.1
Environmental Data 11.1(c)
Hydraulic Generating Facilities 1.1
Indemnity Amount 12.2
Indemnity Payment 12.2
Non-Power Dams 1.1
Purchase Price 3.1
Retained Liabilities 2.2
Seller Indemnitees 12.2
Transaction Taxes 10.1
ARTICLE 2
PURCHASE AND SALE
Section 2.1 Purchase and Sale of Assets. Upon the terms and
subject to the conditions contained herein, at the Closing,
Seller shall sell, transfer, assign, convey and deliver to Buyer,
and Buyer shall purchase and accept delivery from Seller, all of
the Assets, free and clear of all Encumbrances other than
Permitted Encumbrances, and Buyer will assume the regulatory
proceedings related to the Assets listed on Schedule 2.1.
Section 2.2 Retained Liabilities. Except as otherwise
expressly provided in this Agreement, Buyer shall not assume any
and Seller shall retain and pay, perform and discharge when due
all liabilities or obligations, of any kind or nature, relating
to or arising from Seller's ownership, use or operation of the
Assets prior to the Closing Date (the "Retained Liabilities").
Section 2.3 Condition on Assignment or Assumption of Contracts
and Rights. Anything in this Agreement to the contrary
notwithstanding, this Agreement shall not constitute an agreement
to assign or assume any Contract or any claim or right or any
benefit arising thereunder or resulting therefrom if an attempted
assignment or assumption without the Consent of a third party
would constitute a breach. Any transfer or assignment to Buyer
by Seller of any property or property rights or any Contract that
requires the Consent of any third party shall be made subject to
such Consent being obtained.
Section 2.4 Transfer of the Non-Power Dams. Seller intends to
transfer certain Real Property and the Non-Power Dams to the
State of Vermont. The operation of the Non-Power Dams is
governed by the FERC License. If the Non-Power Dams are not
transferred to the State of Vermont prior to the Closing Date,
Seller shall transfer the Non-Power Dams to Buyer so that Buyer
can transfer or sell the Non-Power Dams to the State of Vermont
or another third party as soon as the Non-Power Dams are removed
from the FERC License.
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ARTICLE 3
PURCHASE PRICE
Section 3.1 Purchase Price. Subject to the terms and
conditions of this Agreement, the aggregate purchase price for
the Assets (the "Purchase Price") shall be Ten US Dollars
(US$10.00).
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
Section 4.1 Organization, Existence and Qualification. Buyer
is a corporation duly incorporated, validly existing, and in good
standing under the laws of the State of New Hampshire, with full
corporate power and authority to conduct its business as it is
now being conducted, to own or use the properties and assets that
it purports to own or use, and to perform its obligations.
Within ten (10) days after execution of this Agreement, Buyer
will be authorized to conduct business in the State of Vermont.
Section 4.2 Authority Relative to this Agreement and Binding
Effect. The execution, delivery and performance of this
Agreement and the Related Documents by Buyer have been duly
authorized by Buyer's Board of Directors, which constitutes all
necessary corporate action required on the part of Buyer. The
execution, delivery and performance of this Agreement and the
Related Documents by Buyer will not result in (i) any conflict
with or breach or violation of or default under the
Organizational Documents of Buyer, or (ii) to Buyer's knowledge,
a violation or breach of any term or provision of, or constitute
a default or accelerate the performance required under, any
indenture, mortgage, deed of trust, security agreement, loan
agreement, or Contract to which Buyer is a party or by which its
assets are bound, or (iii) a violation of any Order of any
Governmental Body. This Agreement constitutes, and the Related
Documents to be executed by Buyer when executed and delivered
will constitute, valid and binding obligations of Buyer,
enforceable against Buyer in accordance with their respective
terms, except as such enforceability may be limited by bankruptcy
or similar laws from time to time in effect affecting the
enforcement of creditors' rights generally or the availability of
equitable remedies generally.
Section 4.3 Governmental and Other Required Consents. Except
for those Consents described in Schedule 4.3 and Schedule 5.3, to
the extent applicable to Buyer, no Consent of any Governmental
Body or other Person is required to be obtained by Buyer in
connection with the execution and delivery by Buyer of this
Agreement or the Related Documents or the consummation of the
transactions contemplated by this Agreement or the Related
Documents. Buyer has no knowledge of any facts or circumstances
relating to Buyer that reasonably would be likely to preclude or
prolong the receipt of such required Consents.
Section 4.4 Brokers. No broker or finder has acted for or on
behalf of Buyer in connection with this Agreement or the
transactions contemplated by this Agreement. No broker or finder
is entitled to any brokerage or finder's fee, or to any
commission, based in any way on agreements, arrangements or
understandings made by or on behalf of Buyer for which Seller or
any Affiliate of Seller has or will have any liability or
obligations (contingent or otherwise).
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Section 4.5 Filings. No statement furnished by Buyer for
inclusion in any filing with any Governmental Body in connection
with obtaining a Governmental Body's Consent for the consummation
of the contemplated transactions will contain, as of the date the
information is provided, any untrue statement of a material fact
or will omit to state, as of the date the information is
provided, any material fact which is necessary to make the
statements contained therein, in light of the circumstances under
which they were made, not misleading.
Section 4.6 Independent Investigation. Buyer is
knowledgeable about the use of the Assets and has had access to
the Assets, the officers and employees of Seller, and the records
and files of Seller relating to the Assets. In making the
decision to enter into this Agreement and to consummate the
contemplated transactions, Buyer has relied solely on the basis
of its own independent due diligence investigation of the Assets
and the representations and warranties made in this Agreement.
Subject to the terms of this Agreement, Buyer accepts the Assets
"as is," "where is."
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
Section 5.1 Organization, Existence and Qualification. Seller
is a corporation duly incorporated, validly existing, and in good
standing under the laws of the State of Delaware, with full
corporate power and authority to conduct its business as it is
now being conducted, to own or use the Assets, to perform its
obligations under all Contracts to which it is a party, and to
execute and deliver this Agreement and the Related Documents to
which Seller is a party. Seller is duly qualified to do business
as a foreign corporation and is in good standing under the laws
of the State of Vermont and each other state in which the failure
to be so qualified or in good standing would have a Material
Adverse Effect.
Section 5.2 Authority Relative to this Agreement and Binding
Effect. The execution, delivery and performance of this
Agreement and the Related Documents by Seller have been duly
authorized by all requisite corporate action. The execution,
delivery and performance of this Agreement and the Related
Documents by Seller will not result in (i) any conflict with or
breach or violation of or default under the Organizational
Documents of Seller, (ii) to Seller's Knowledge, a violation or
breach of any term or provision of, or constitute a default or
accelerate the performance required under, any indenture,
mortgage, deed of trust, security agreement, loan agreement, or
Contract to which Seller is a party or by which any of the Assets
are bound, or (iii) a violation of any Order of any Governmental
Body. This Agreement constitutes, and the Related Documents to
be executed by Seller when executed and delivered will
constitute, valid and binding obligations of Seller, enforceable
against Seller in accordance with their terms, except as
enforceability may be limited by bankruptcy or similar laws from
time to time in effect affecting the enforcement of creditors'
rights generally or the availability of equitable remedies
generally.
Section 5.3 Governmental and Other Required Consents. Except
as set forth in Schedule 5.3, no Consent of any Governmental Body
or other Person is required to be obtained by Seller in
connection with the execution and delivery by Seller of this
Agreement or the Related Documents or the consummation by Seller
of the transactions contemplated by this Agreement or the Related
Documents.
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Section 5.4 Filings; Public Utility Holding Company Status;
Regulation as a Public Utility. No statement furnished by Seller
for inclusion in any filing with any Governmental Body in
connection with obtaining such Governmental Body's Consent for
the consummation of the transactions contemplated by this
Agreement will contain, as of the date such information is so
provided, any untrue statement of material fact or will omit to
state, as of the date such information is so provided, any
material fact which is necessary to make the statements contained
therein, in light of the circumstances under which they were
made, not misleading. Seller is a "public utility company" and
is not a "holding company" or a "subsidiary" or an "affiliate" of
a "public utility company" or of a "holding company," within the
meanings of such terms in PUHCA.
Section 5.5 Title to Assets, Owned Real Property and
Encumbrances.
(a) Seller has good and indefeasible title to the
Assets. None of the Assets are subject to any Encumbrance except
Permitted Encumbrances. Schedule 5.5 lists each parcel of Real
Property owned in fee simple by Seller or any Affiliate of Seller
that is a part of the Assets and all Easements that relate to the
Real Property. The Assets include all Easements necessary to
access and operate the Hydraulic Generating Facilities and the
Diesel Generating Facilities and all Easements necessary to
access the Non-Power Dams without any known conflict with the
rights of others, in each case except to the extent that the
failure to own or possess such Easements would not have a
Material Adverse Effect. Seller does not possess any leasehold
interests used in the operation of the Assets.
(b) No condemnation, expropriation, eminent domain or
similar Proceeding is pending or, to the Knowledge of Seller,
threatened with respect to any of the Assets.
(c) Seller is in compliance with all Easements and
similar realty interests benefiting or encumbering the Real
Property other than such instances of non-compliance, if any,
which are not, individually or in the aggregate, reasonably
likely to have a Material Adverse Effect. The Real Property, and
all improvements thereon, do not violate any applicable zoning,
construction code or other restriction of any Governmental Body
other than such violations, if any, which are not, individually
or in the aggregate, reasonably likely to have a Material Adverse
Effect.
(d) Except as set forth in Schedule 5.5, all
buildings, structures and equipment that are a part of the Assets
and purportedly located on Real Property owned by Seller lie
wholly within the boundaries of such Real Property and do not
encroach upon the property of, or otherwise conflict with the
property rights of, any other Person other than such
encroachments, if any, which are not, individually or in the
aggregate, reasonably like to have a Material Adverse Effect.
None of the buildings, structures or equipment that are a part of
the Assets, nor the operation and maintenance thereof, violates
any restrictive covenant other than such violations, if any,
which are not, individually or in the aggregate, reasonably
likely to have a Material Adverse Effect.
Section 5.6 Compliance with Legal Requirements; Governmental
Permits. Except with respect to Environmental Law, which is
covered by Section 5.11, or as set forth in Schedule 5.6, (i)
Seller is not in violation of any Legal Requirement that is
applicable to it or to the ownership or use of any of the
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Assets, other than such violations, if any, which are not,
individually or in the aggregate, reasonably likely to have a
Material Adverse Effect, and (ii) Seller possesses all permits,
licenses, and authorizations from Governmental Bodies required by
any applicable Legal Requirement necessary to permit the
operation and use of the Assets in the manner in which the Assets
are currently being operated and used by Seller, except where the
failure to possess any such permit, license or authorization is
not reasonably likely to result in a Material Adverse Effect.
Section 5.7 Legal Proceedings; Outstanding Orders. Except as
set forth in Schedule 5.7, there is no pending or threatened
Proceeding (i) that has been commenced against Seller that is
reasonably likely to have a Material Adverse Effect, or (ii) as
of the date of this Agreement, that challenges, or that may have
the effect of preventing, delaying, making illegal, or otherwise
interfering with, the contemplated transactions. Except as
disclosed in Schedule 5.7, there are currently no outstanding
Orders against Seller which relate to or arise out of the
ownership, use, condition or operation of the Assets which
individually or in the aggregate would have a Material Adverse
Effect.
Section 5.8 Taxes. Seller has filed all United States
federal, state and local income Tax Returns required to be filed
by Seller relating to the Assets or has "timely" filed requests
for extensions to file such Tax Returns, and Seller has paid and
discharged or made adequate provision for all such Taxes. There
are no pending audits or other examinations relating to any Tax
matters relating to the Assets. There are no Tax liens on the
Assets. As of the date of this Agreement, Seller has not granted
any waiver of any statute of limitations with respect to, or any
extension of a period for the assessment of, any Tax relating to
the Assets.
Section 5.9 Condition of Assets. The Newport Generating
Facility Units 1 and 2 are operational, but the other Hydraulic
Generating Facilities are not operational and are in need of
maintenance and repairs. The Newport Generating Facility Units 1
and 2 are capable of generating power at 1.7 megawatts per unit.
Certain of the Hydraulic Generating Facilities and Non-Power Dams
require modification in order to comply with the Water Quality
Certification issued by the Vermont Agency of Natural Resources,
dated August 1, 2002, as amended by the Amended Water Quality
Certification issued by the Vermont Water Resources Board, dated
July 11, 2003, and as may be further amended. The Diesel
Generating Facilities include seven diesel generators, referred
to as Xxxxx 0, 0, 0, 0, 0, 0 and 10. Of the seven diesel
generators, Units 4, 6, 9 and 10 are operational as of the date
of this Agreement, but the other generators are not operational
and are in need of repairs to become operational.
Section 5.10 Contracts. Schedule 5.10 contains a complete and
correct list as of the date of this Agreement of all Contracts
related to the operation of the Assets (other than Easements).
Each Contract is in full force and effect and enforceable against
the parties thereto. There are no material defaults and Seller
has not rescinded nor given notice of a default or claimed
default under any Contract. No event has occurred which with
notice or lapse of time, or both, would constitute a material
default under any Contract.
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Section 5.11 Environmental Matters.
(a) Seller is in compliance with all permits, licenses
and governmental authorizations required for the operation of the
Assets under applicable Environmental Laws, other than such
instances of non-compliance, if any, which are not reasonably
likely to have a Material Adverse Effect.
(b) Since December 31, 1998, Seller has not received a
written notice from a Governmental Body that Seller is in
violation of any Environmental Law arising out of Seller's
ownership, use or operation of the Assets.
(c) Except as listed in Schedule 5.11, there are no
Proceedings pending or, to Seller's Knowledge, threatened with
respect to Seller's compliance with Environmental Laws and
relating to the Assets. To Seller's Knowledge, there is no
reasonable basis for any Proceeding against Seller that would
impose any liability or obligation that would have or would
reasonably be expected to have a Material Adverse Effect.
(d) Except as listed in Schedule 5.11, Seller
possesses all certificates, permits and authorizations required
by any Environmental Law for Seller's ownership, use or operation
of the Assets.
(e) Except as set forth in Schedule 5.11, no
environmental remediation of any Release is occurring on any Real
Property included in the Assets nor has Seller issued a request
for proposal or otherwise asked an environmental remediation
contractor to begin plans for any such environmental remediation.
(f) To Seller's Knowledge, during or prior to the
period of Seller's ownership, use or operation of the Assets,
there were no Releases or threatened Releases which would
reasonably be expected to have a Material Adverse Effect.
(g) None of the Real Property is (i) to Seller's
Knowledge, situated in a federal "Superfund" site, or in any
federal "Superfund" study area designated under the federal
Comprehensive Environmental Response, Compensation and Liability
Act ("CERCLA"), or (ii) to Seller's Knowledge, situated in any
site or study area designated under any state statute comparable
to CERCLA.
(h) Seller has delivered to Buyer copies of Seller's
environmental assessments, audits and environmental reports
relating to the Real Property or any of the other Assets or which
concern the existence or possible existence of Hazardous
Materials on, under or adjacent to any of the Real Property or
relating to potential Environmental Liability of Seller in
connection with the Assets.
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(i) To Seller's Knowledge, there are no circumstances
or conditions involving the Assets and not arising from or
relating to the FERC License or the Section 401 Water Quality
Certification that could reasonably be expected to result in any
claims, liability, investigations, costs or restrictions on the
ownership, operation, use or transfer of any of the Real Property
pursuant to any Environmental Law which would reasonably be
expected to have a Material Adverse Effect other than with
respect to any activity after the date hereof that disturbs
asbestos or asbestos-containing materials which causes them to
become friable. Except as set forth in Schedule 5.11, to
Seller's Knowledge, as of the date hereof, there is no friable
asbestos in any of the Assets.
Section 5.12 State and Federal Regulatory Matters. Schedule
5.12 reflects all of the currently pending Proceedings of state
or federal regulatory commissions naming Seller as a Party and
relating to the Assets. All currently effective filings relating
to the Assets made by Seller with state or federal regulatory
commissions were made in compliance with Legal Requirements and
the information contained therein was true and correct in all
material respects as of the respective dates of those filings.
Section 5.13 Brokers. No broker or finder has acted for or on
behalf of Seller or any Affiliate of Seller in connection with
this Agreement or the transactions contemplated by this
Agreement. No broker or finder is entitled to any brokerage or
finder's fee, or to any commission, based in any way on
agreements, arrangements or understandings made by or on behalf
of Seller or any Affiliate of Seller for which Buyer has or will
have any liabilities or obligations (contingent or otherwise).
Section 5.14 Disclaimer. Except as otherwise expressly set
forth in this Article V, Seller expressly disclaims any
representations or warranties of any kind or nature, express or
implied, as to the condition, value or quality of the Assets,
except as provided in Section 5.9, and Seller SPECIFICALLY
DISCLAIMS ANY REPRESENTATION OR WARRANTY OF MERCHANTABILITY,
USAGE, SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE WITH
RESPECT TO THE ASSETS OR THE ABSENCE OF ANY LATENT DEFECTS
THEREIN.
ARTICLE 6
COVENANTS AND OTHER AGREEMENTS
Section 6.1 Covenants of Seller. Seller agrees to observe and
perform the following, covenants and agreements:
(a) Conduct Prior to the Closing Date. With respect
to the Assets, except (i) as contemplated in this Agreement, (ii)
as disclosed in Schedule 6.1(a), (iii) as required by any Legal
Requirement or Order, or (iv) as otherwise expressly consented to
in writing by Buyer, which consent will not be unreasonably
withheld or delayed, prior to the Closing, Seller will:
(1) Not make or permit any adverse change in the
general nature or condition of the Assets;
(2) Maintain the Assets in their present
condition, reasonable wear and tear excepted, and make the
repairs listed on Schedule 6.1(a)(2);
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(3) Not enter into any transaction or Contract
other than in the ordinary course of business, consistent with
past practices and not enter into any Contract creating a
obligation in excess of $10,000 that is not terminable by Seller
without penalty on no more than ninety (90) days notice;
(4) Not sell, lease, encumber, dispose of or
otherwise transfer or make any Contract for the sale, lease,
encumbrance, disposition or transfer of any of the Assets other
than in the ordinary course of business;
(5) Comply in all material respects with all
applicable Contracts, Legal Requirements and Orders, including
without limitation those relating to the filing of reports and
the payment of Taxes due to be paid prior to the Closing, other
than those contested in good faith;
(6) Not terminate any Contract included among the
Assets except in the case of a breach of such Contract by the
other party;
(7) Not engage in any activity regarding any of
the Assets that may cause asbestos or asbestos-containing
materials to become friable;
(8) Not allow the lapse, termination or amendment
of any license or permit including, but not limited to, licenses
issued to Seller by FERC; and
(9) Seller may settle state tax proceedings for
the current tax year, but will not, without the prior written
consent of Buyer, take any action or enter into any agreement
that will establish an assessed value or a real property tax
liability for subsequent tax years or enter into an agreement to
not challenge or contest the assessed value or real property tax
liability for subsequent tax years.
(b) Access to the Assets and Records; Updating
Information.
(1) From and after the date of this Agreement and
until the Closing Date, Seller shall permit Buyer and its
Representatives to have, on reasonable notice and at reasonable
times, reasonable access to all books, papers and records to the
extent that they reasonably relate to the ownership, use and
operation of the Assets.
(2) Seller will notify Buyer as promptly as
practicable of any significant change in the Assets and of any
material Proceedings (threatened or pending) involving or
affecting the Assets or the transactions contemplated by this
Agreement, and shall use reasonable efforts to keep Buyer fully
informed of such events.
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(c) Exclusivity. Until consummation of the
contemplated transactions or termination of this Agreement, other
than a transfer or grant of the Non-Power Dams to the State of
Vermont and an assignment of this Agreement to Vermont Electric
Cooperative, neither Seller nor its representatives, officers,
directors, employees or agents will, directly or indirectly,
enter or consummate an agreement relating to the (i) sale or
transfer of the Assets, (ii) a transaction involving the Assets,
or (iii) an encumbrance of the Assets other than easements to be
granted to or reserved for the benefit of Seller or Vermont
Electric Cooperative, Inc. and Vermont Electric Power Company,
Inc. as part of asset sales to those entities, which easements
shall be substantially similar in form to Exhibit B.
(d) Consents and Permits. Seller will use its
commercially reasonable efforts to obtain all necessary Consents
and permits from any Person required to consummate the
transactions contemplated hereby, including the Consent of any
Person required under any Legal Requirement or Contract
applicable to the Assets and all Consents and permits described
in Schedule 5.3.
(e) 401 Certification. Until the Closing, Seller
shall continue to defend the issuance of the 401 Certification
that was the subject of the Vermont Water Resources Board's July
11, 2003 Order, which order is being challenged by a motion to
alter.
Section 6.2 Covenants of Buyer. Buyer agrees to observe and
perform the following covenants and agreements:
(a) Consents and Permits. Buyer will use its
commercially reasonable efforts to assist Seller in obtaining all
necessary Consents and permits from any Person required to
consummate the contemplated transactions, including the Consent
of any Person required under any Legal Requirement or Contract
applicable to the Assets, and will use its commercially
reasonable efforts to obtain all Consents and permits described
in Schedule 4.3. Within ten (10) days after execution of this
Agreement, Buyer will provide evidence of its authority to
conduct business in the State of Vermont, a copy of its Bylaws,
and a certified copy of its Articles of Incorporation to Seller's
FERC counsel.
(b) Access to Information. After Closing, Buyer will,
and will cause its Representatives to, afford to Seller and its
Representatives, reasonable access to all books, records, files
and documents related to the Assets in order to permit Seller to
prepare and file its tax returns and to prepare for and
participate in any investigation with respect thereto, to prepare
for and participate in any other investigation and defend any
Proceedings relating to or involving Seller or the Assets for
which Seller may be responsible, to discharge its obligations
under this Agreement and the other Related Documents to which it
is a party and for other reasonable purposes and will afford
Seller reasonable assistance in connection therewith. Buyer will
cause such records to be maintained for not less than seven years
from the Closing Date.
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Section 6.3 Governmental Filings.
(a) Buyer and Seller will, as soon as reasonably
practicable following the execution of this Agreement, prepare
and file with each Governmental Body requests for such Consents
as may be necessary for the transfer of the Assets in accordance
with the terms of this Agreement. Buyer and Seller will
diligently pursue such Consents and will cooperate with each
other in seeking such Consents. Notwithstanding anything to the
contrary contained in this Agreement, in connection with or as a
condition to receiving any Consent, neither Seller nor Buyer
shall be required (i) to divest, abandon, license or take similar
action with respect to any of its assets or any of its respective
Affiliates, or (ii) to expend material sums of money or grant any
material financial or other accommodations.
(b) In connection with applications and other filings
for any required regulatory approval, Buyer and Seller shall
jointly, and on an equal basis, coordinate the overall
development of the positions to be taken and the regulatory
actions to be requested in such applications and filings for
approval of the sale by Seller and the purchase by Buyer of the
Assets, of all other matters contemplated by this Agreement which
require regulatory approval and of all other regulatory matters
incidental thereto which are to be addressed in such applications
and filings. Efforts to obtain any necessary approvals
(including from the VPSB) shall be prosecuted by counsel mutually
agreed upon by the parties, and acting as joint counsel to the
parties, it being understood, however, that (i) all positions
taken in the filings with such Governmental Bodies shall be
consistent with the mutual understandings of the parties, and
(ii) Seller's Vermont regulatory counsel and FERC regulatory
counsel shall act as joint counsel to the parties in connection
with their joint applications to the VPSB and FERC, respectively.
In connection with all applications and filings for all required
regulatory approvals in which Buyer and Seller act jointly, at
least five (5) business days prior to filing any application or
filing, each party shall be provided with a copy of the proposed
application or filing and shall have three (3) business days to
review and provide to counsel its comments on the proposed
application or filing; provided, that with respect to a response
to an information request from any Governmental Body, each party
shall have only two (2) business days to review and provide to
counsel its comments to the proposed response. The fees and
expenses of joint counsel shall be borne by, and be the exclusive
responsibility of Seller.
Section 6.4 Interconnection Agreement. At the Closing, Buyer
and Seller will execute and deliver the Interconnection Agreement
and the Transmission Service Agreements substantially in the form
of Exhibits C-1, C-2 and C-3, respectively. If the Closing
occurs prior to the consummation of the transaction between
Seller and Vermont Electric Cooperative, Inc., then at the
closing of such transaction, the obligation to enter into the
Interconnection Agreement shall be assigned to Vermont Electric
Cooperative, Inc. Exhibits C-1, C-2 and C-3 are subject to
modification by FERC counsel to the extent necessary to satisfy
FERC regulatory requirements.
Section 6.5 Sale to Vermont Electric Cooperative. If Seller
closes its pending sale transaction with Vermont Electric
Cooperative, Inc. prior to the Closing of this Agreement, Buyer
acknowledges that Vermont Electric Cooperative, Inc. will assume
this Agreement as part of the Seller/Vermont Electric
Cooperative, Inc. transaction, which transaction is evidenced by
a
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Purchase and Sale Agreement dated April 15, 2003, and Buyer shall
acquire the Assets from Vermont Electric Cooperative, Inc. at the
earliest possible date pursuant to the terms of this Agreement.
In connection with the assignment of this Agreement to Vermont
Electric Cooperative, Inc., Seller shall use its reasonable best
efforts to cause Vermont Electric Cooperative to perform the
obligations of Seller arising under the terms of this Agreement
and Seller shall be directly obligated to Buyer with respect to
(i) any damages sustained or incurred by Buyer in connection with
Buyer's termination of this Agreement pursuant to Section 9.1(c),
as a result of the willful failure by Vermont Electric
Cooperative, Inc. to fulfill a closing condition of Buyer or to
perform in any material respect a covenant of this Agreement,
provided that Seller shall not be liable for punitive, indirect
or consequential damages, and (ii) the indemnification of Buyer
pursuant to the terms of Section 12 of this Agreement. If
Vermont Electric Cooperative, Inc. fails to perform the
obligations of Seller arising under the terms of this Agreement,
in addition to all other rights and remedies that Buyer may have
in connection with enforcing its rights under this Agreement,
Buyer shall be entitled to commence an action to seek to obtain
an order for specific performance or any other equitable remedy
in any federal or state court of competent jurisdiction to
enforce the terms of this Agreement against Vermont Electric
Cooperative, Inc.
Section 6.6 Schedule of Easements and Real Property Interests.
Not less than thirty (30) days prior to the Closing Date, Seller
shall deliver to Buyer a list of all Easements and ownership
interests in Real Property included in the Assets, together with
title descriptions, recorded and unrecorded acts, and other
information as shall be customary in the State of Vermont to
identify and convey such Easements and ownership interests. All
material Easements that, as a condition to their assignment,
require Consent from the grantor, shall be so designated on the
easement list.
Section 6.7 Risk of Loss.
(a) Risk of Loss. From the date of this Agreement
through the Closing Date, all risk of loss or damage to the
Assets shall be borne by Seller, other than loss or damage caused
by the acts or negligence of Buyer or any Buyer Representative,
which loss or damage shall be the responsibility of Buyer.
(b) Takings. If, before the Closing Date, all or any
portion of the Assets are taken by eminent domain,
municipalization or condemnation or are the subject of a pending
taking Proceeding which has not been consummated (a "Taking"),
then
(i) Seller shall promptly notify Buyer, in
writing, of the Taking;
(ii) Buyer may elect to, in the name of
Seller, negotiate for, claim, contest and receive the
portion of the award properly allocable to those Assets that
are the subject of the Taking;
(iii) to the extent the Taking shall have
been consummated prior to the Closing, Seller shall be
relieved of its obligation to convey to Buyer those Assets
that were the subject of the Taking;
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(iv) at the Closing, Seller will assign to
Buyer all of its rights to damages payable as a result of
the Taking, and will pay to Buyer all damages previously
paid to it in connection with the Taking, in each case to
the extent properly allocable, to those Assets that are the
subject of the Taking;
(v) following the Closing, Seller will give
to Buyer any further assurances of such rights and
assignment with respect to the Taking as Buyer reasonably
may request from time to time; and
(vi) any damages paid to Buyer as a result of
a Taking shall reduce, dollar-for-dollar, the Indemnity
Amount as provided in Section 12.2(a).
Section 6.8 Cure of Material Adverse Effect. In the event of
an occurrence of a Material Adverse Effect, Seller shall, upon
having knowledge of such Material Adverse Effect, promptly notify
Buyer of such occurrence. Seller shall have the right to cure or
remedy the circumstances giving rise to the Material Adverse
Effect prior to the Drop Dead Date.
ARTICLE 7
CONDITIONS PRECEDENT
Section 7.1 Seller's Conditions Precedent to Closing. The
obligation of Seller to consummate the transactions contemplated
by this Agreement shall be subject to fulfillment at or prior to
the Closing of the following conditions:
(a) Representations and Warranties True as of the
Closing Date. Buyer's representations and warranties in this
Agreement shall have been true and correct as of the date of this
Agreement and shall be true and correct in all material respects
as of the Closing Date as if made on the Closing Date, subject to
changes expressly contemplated and permitted by this Agreement
except that representations and warranties made as of, or in
respect of, only a specified date or period shall be true and
correct in all material respects as of, or in respect of, such
date or period.
(b) Compliance with Agreements. The covenants,
agreements and conditions required by this Agreement to be
performed and complied with by Buyer shall have been performed
and complied with in all material respects prior to or at the
Closing Date.
(c) Certificate. Buyer shall execute and deliver to
Seller a certificate of an authorized officer of Buyer, dated the
Closing Date, stating that the conditions specified in Sections
7.1 (a) and 7.1(b) of this Agreement have been satisfied.
(d) Governmental Approvals and Other Consents. Seller
shall have obtained all Consents or Orders from all Governmental
Bodies and other Persons which are required in order to
consummate the transactions contemplated hereby and to transfer
the Assets to Buyer without Seller incurring material liability
under any Legal Requirement, Order or Contract, except as
contemplated by this Agreement, including those consents listed
on Schedules 4.3 and 5.3.
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(e) Injunctions. On the Closing Date, there shall be
no Orders which operate to restrain, enjoin or otherwise prevent
the consummation of the transactions contemplated by this
Agreement.
(f) Documents. Buyer shall have delivered all the
certificates, instruments, contracts and other documents
specified to be delivered by it hereunder on or before the
Closing Date.
Section 7.2 Buyer's Conditions Precedent to Closing. The
obligation of Buyer to consummate the transactions contemplated
by this Agreement shall be subject to fulfillment at or prior to
the Closing of the following conditions:
(a) Representations and Warranties True as of the
Closing Date. Seller's representations and warranties in this
Agreement shall have been true and correct as of the date of this
Agreement and shall be true and correct as of the Closing Date as
if made on the Closing Date, subject to changes expressly
contemplated and permitted by this Agreement; (i) except that
representations and warranties made as of, or in respect of, only
a specified date or period shall be true and correct as of, or in
respect of, such date or period, and (ii) to the extent that any
failure of such representations and warranties to be true and
correct as aforesaid when taken in the aggregate would not have a
Material Adverse Effect.
(b) Compliance with Agreements. The covenants,
agreements and conditions required by this Agreement to be
performed and complied with by Seller shall have been performed
and complied with prior to or at the Closing Date, except where
the failure to so perform or comply when taken in the aggregate
would not have a Material Adverse Effect.
(c) Certificate. Seller shall execute and deliver to
Buyer a certificate of an authorized officer of Seller, dated the
Closing Date, stating that the conditions specified in Sections
7.2(a) and 7.2(b) of this Agreement have been satisfied.
(d) Governmental Approvals. Seller and Buyer shall
have obtained all Consents and Orders from all Governmental
Bodies and other Persons which are required in order to
consummate the transactions contemplated hereby, including those
consents listed on Schedules 4.3 and 5.3.
(e) Injunctions. On the Closing Date, there shall be
no Orders which operate to restrain, enjoin or otherwise prevent
the consummation of the transactions contemplated by this
Agreement.
(f) Documents. Seller shall have delivered all of the
certificates, instruments, contracts and other documents
specified to be delivered by it hereunder.
(g) No Material Adverse Change. Since the date of
execution of this Agreement, no Material Adverse Effect shall
have occurred that has continuing effect as of the Closing Date.
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(h) Interconnection Agreement. Buyer and Seller shall
have executed the Interconnection Agreement and the Transmission
Service Agreements substantially similar to the forms of Exhibits
C-1, C-2 and C-3, respectively, that allow the power generated
from the Newport Generating Facility Units 1, 2, and 3, and the
Diesel Generating Facilities to be delivered to the Newport
Substation in Newport, Vermont, at no cost to Buyer, and grant to
Buyer a reservation for Firm Point-to-Point Transmission Service
and Non-Firm Point-to-Point Transmission Service under Seller's
Open Access Transmission Tariff from Buyer's interconnection at
the Newport Substation in Newport, Vermont to the VELCO Irasburg
Substation in Irasburg, Vermont.
ARTICLE 8
CLOSING
Section 8.1 Closing. The closing of the purchase and sale of
the Assets (the "Closing") will take place by overnight mail or
facsimile delivery to the offices of McLane, Graf, Xxxxxxxxx &
Xxxxxxxxx, Professional Association, 10th Floor, 000 Xxx Xxxxxx,
Xxxxxxxxxx, Xxx Xxxxxxxxx 00000 on the fifth (5th) business day
after the date that all conditions precedent in Sections 7.1(d)
and 7.2(d) have been satisfied or at such other time, date and
place agreed to by the parties. The date of the Closing is
referred to in this Agreement as the "Closing Date." The
transactions to be consummated on the Closing Date shall be
deemed to have been consummated as of 12:01 a.m. on the Closing
Date. At the Closing the following events shall occur, each
event being deemed to have occurred simultaneously with the other
events.
(a) Xxxx of Sale. Seller and Buyer shall execute and
deliver the Xxxx of Sale and Assignment and Assumption Agreement
in the form attached as Exhibit D (the "Xxxx of Sale").
(b) Deeds. Seller shall deliver limited warranty
deeds for each parcel of Real Property.
(c) Payment of Purchase Price. Buyer will pay to
Seller an amount equal to the Purchase Price in lawful money of
the United States of America.
(d) Other Related Documents. Seller and Buyer shall
execute and deliver such other Related Documents (including
easement assignments, conveyances, and special assignment and
assumption instruments) and shall obtain and deliver such other
certificates reasonably requested by a party that are necessary
in order to satisfy any applicable Legal Requirements relating to
the transfer of the Assets to Buyer or which are customarily
delivered in the State of Vermont to accomplish transfers of
assets of the type involved; provided, however, that nothing in
this clause shall obligate Seller or any Affiliate of Seller to
execute or deliver any document that affects, in a manner
materially adverse to Seller, Seller's liability to Buyer as
expressed herein and in the Xxxx of Sale; and provided that
nothing in this clause shall obligate Buyer or an Affiliate of
Buyer to execute or deliver any document that affects, in a
manner materially adverse to Buyer, Buyer's liability to Seller
as expressed herein and in the Xxxx of Sale.
(e) FIRPTA Certificate. Seller shall execute and
deliver to Buyer a Certification of non-foreign status within the
meaning of Treasury Regulations Section 1.1445-2.
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ARTICLE 9
TERMINATION
Section 9.1 Termination Rights. This Agreement may be
terminated in its entirety at any time prior to the Closing:
(a) By the mutual written agreement of Seller and
Buyer;
(b) By Buyer or Seller in writing if there shall be in
effect a nonappealable Order prohibiting, enjoining or
restricting the transactions contemplated by this Agreement;
(c) By Buyer, upon the breach of any of the
representations and warranties of Seller contained herein or in
the failure by Seller to perform and comply with any of the
agreements and obligations required by this Agreement to be
performed or complied with by Seller, provided that such breach
or failure has a Material Adverse Effect and is not cured or
otherwise addressed by Seller in a manner reasonably acceptable
to Buyer on or before May 31, 2004 (the "Drop Dead Date");
provided, however, that Buyer may terminate this Agreement upon
its reasonable determination that Seller will not be able to cure
any such breach by the Drop Dead Date;
(d) By Seller, upon the breach of any of the
representations and warranties of Buyer contained herein or the
failure by Buyer to perform and comply with any of the agreements
and obligations required by this Agreement to be performed or
complied with by Buyer in any material respects, provided that
such breach or failure is not cured or otherwise addressed by
Buyer in a manner reasonably acceptable to Seller on or before
the Drop Dead Date; provided, however, that Seller may terminate
this Agreement upon its reasonable determination that Buyer will
not be able to cure any such breach by the Drop Dead Date;
(e) By either party in writing if the Closing has not
occurred on or before the Drop Dead Date; or
(f) By Seller or Buyer, as appropriate, if any
Governmental Body whose Consent is required for purposes of
operating the Assets has affirmatively indicated that such
Consent will not be given or will contain terms or conditions
unacceptable in any material respect to Seller or Buyer in their
reasonable discretion or, if such Consent has been obtained,
contains terms or conditions unacceptable in any material respect
to Seller or Buyer, in their reasonable discretion.
Section 9.2 Limitation on Right to Terminate; Effect of
Termination.
(a) A party shall not be entitled to exercise any
right of termination pursuant to Section 9.1 if the event giving
rise to the termination right shall be due to the willful failure
of such party seeking to terminate this Agreement to perform or
observe in any material respect any of the covenants or
agreements hereof to be performed or observed by such party.
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(b) Upon the termination of this Agreement under
Section 9.1, the parties shall have no further duties,
obligations or liabilities to each other except for those duties
or obligations that explicitly survive termination of this
Agreement. If, however, a party terminates this Agreement as a
result of the willful failure by the other party to fulfill a
condition to the performance of the terminating party or to
perform in any material respect a covenant of this Agreement or
from a material and willful breach of this Agreement by the other
party (it being understood that the failure to cure a breach
shall not, by itself, be a willful breach of this Agreement),
then the breaching party shall be fully liable for any and all
damages sustained or incurred by the terminating party; provided,
however, that no party shall be liable for punitive, indirect or
consequential damages.
ARTICLE 10
TAX MATTERS
Section 10.1 Transaction Taxes. Seller shall bear and be
responsible for paying any sales, use, transfer, documentary,
registration, business, occupation, or other similar Taxes
(including related penalties (civil or criminal), additions to
tax, and interest) imposed by any Governmental Body with respect
to the transfer of Assets (including the Real Property) to Buyer
("Transaction Taxes"), regardless of whether the tax authority
seeks to collect such Taxes from Seller or Buyer. Seller shall
also be responsible for (i) administering the payment of such
Transaction Taxes, (ii) defending or pursuing any proceedings
related thereto, and (iii) paying any expenses related thereto.
Section 10.2 Real and Personal Property Taxes. All real and
personal property Taxes and assessments relating to the Assets
for the period prior to the Closing Date shall be paid by Seller,
while all such Taxes for the period on and after the Closing Date
shall be paid by Buyer. Buyer shall forward, as soon as
practicable, to Seller a copy of any such tax xxxx, invoice or
statement received by Buyer. Seller then shall forward to Buyer
payment in immediately available funds of its pro rata share of
such Taxes as soon as practicable in advance of the due date of
the tax xxxx, invoice or statement and in time to avoid the
incurrence of penalties or interest. Upon its receipt of such
payment, Buyer will pay the full amount of the tax xxxx, invoice
or statement to the applicable taxing authority. If Seller first
receives a tax xxxx, invoice or statement relating to the Assets
from a taxing authority, Seller shall immediately forward such
tax xxxx, invoice or statement to Buyer. Notwithstanding the
foregoing, if, after the Closing Date, it is determined that the
actual amount of the pro rated real and personal property Taxes
is less than the amount paid by Buyer, and Seller receives a
refund relating to real and personal property Taxes paid, then
Seller shall promptly pay to Buyer the portion of the refund
representing the tax refund attributable to the period after the
Closing Date.
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ARTICLE 11
ENVIRONMENTAL MATTERS
Section 11.1 Environmental Due Diligence.
(a) Right to Conduct Environmental Due Diligence.
Except as otherwise set forth in this Section 11.1, Buyer may
undertake reasonable environmental due diligence prior to the
Closing, including a review of the Environmental Data. Buyer
also has required Seller to make the representations concerning
environmental matters set forth in Section 5.11, upon which Buyer
is relying. All activities of Buyer regarding environmental due
diligence shall be conducted to minimize any inconvenience or
interruption of the normal use and enjoyment of the Assets.
(b) Delivery of Environmental Reports. Seller has
made available to Buyer before the date of execution of this
Agreement copies of any written environmental audits, reports or
studies of Seller concerning the existence or possible existence
of Hazardous Materials on, or under or adjacent to any of the
Real Property or relating to potential Environmental Liability of
Seller in connection with the Assets that are identified in a
schedule delivered to Buyer on or prior to the date hereof
("Environmental Reports").
(c) Confidentiality of Environmental Data. All
audits, reports and studies delivered to or prepared by Buyer and
all other information collected and generated as a result of
Buyer's environmental due diligence ("Environmental Data") shall
be kept strictly confidential and shall not be disclosed or
released without the prior written consent of Seller, except as
required by law. The Environmental Data shall be transferred
among Buyer and its consultant(s) in a manner that will preserve,
to the greatest extent possible, such privileges. Buyer
expressly agrees that until the Closing, it will not distribute
the Environmental Data to any third party without Seller's prior
written consent, except as required by law.
(d) Additional Due Diligence. Notwithstanding the
foregoing, if prior to the Closing, Seller receives notice of any
Proceeding or threatened Proceeding arising under Environmental
Laws, or if Seller otherwise acquires Knowledge that is
reasonably likely to require a change to Schedule 5.11, Seller
promptly shall notify Buyer of the same and Buyer may require
that specific additional environmental due diligence measures be
conducted by Seller to determine the extent of such potential
Environmental Liability. Any Environmental Liability identified
by Seller to Buyer prior to the Closing Date that is not remedied
by Seller prior to the Closing Date shall be considered a
Retained Liability for purposes of this Agreement.
ARTICLE 12
INDEMNIFICATION
Section 12.1 General Indemnification by Seller. From and after
Closing and subject to the other provisions of this Article 12,
Seller shall indemnify and hold harmless Buyer and its
Representatives (collectively, the "Buyer Indemnitees") from and
against any and all Losses actually incurred by a Buyer
Indemnitee and directly resulting from:
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(a) any representations and warranties made by Seller
in this Agreement not being true and correct when made or when
required by this Agreement to be true and correct, or any breach
or default by Seller in the performance of its covenants,
agreements, or obligations under this Agreement required to be
performed prior to Closing;
(b) any breach or default by Seller in the performance
of its covenants, agreements, or obligations under this Agreement
or any Related Document required to be performed after Closing;
(c) the Retained Liabilities.
Section 12.2 Indemnity for Compliance with FERC License
Requirements, Dismantling and Sharing of Cost Savings.
(a) Indemnity. For a period of three (3) years
following the Closing, Seller shall indemnify Buyer for all costs
and expenses up to a limit of three million five hundred thousand
US dollars (US $3,500,000) ("Indemnity Amount"), actually
incurred by Buyer after Closing and directly resulting from (i)
bringing the Hydraulic Generating Facilities into compliance1
with the FERC License, if necessary, and the Water Quality
Certification issued by the Vermont Agency of Natural Resources,
dated August 1, 2002, as amended by the Amended Water Quality
Certification issued by the Vermont Water Resources Board, dated
July 11, 2003, if necessary, (ii) retiring and/or dismantling any
of the Hydraulic Generating Facilities pursuant to any permits,
licenses or Orders, (iii) dismantling any of the dams which
constitute part of the Hydraulic Generating Facilities pursuant
to any permits, licenses or Orders, and (iv) removing any friable
asbestos or friable asbestos-containing material found in the
Assets up to a maximum of Fifty Thousand Dollars ($50,000), other
than asbestos which became friable as a result of any negligent
action by Buyer. Buyer shall forward to Seller periodic
statements of such costs and expenses and Seller shall have
thirty (30) days to review such statements and give Buyer written
notice of any reasonable objections. Within thirty (30) days of
receipt of such statements, Seller shall pay any undisputed
amounts to Buyer. Any amounts not paid by the due date will be
deemed delinquent and will accrue interest at the Interest Rate,
such interest to be calculated from, and including, the due date
to, but excluding, the date the delinquent amount is paid in
full. Seller shall pay any disputed amounts to Buyer no later
than thirty (30) days following resolution of such dispute along
with interest accrued at the Interest Rate, such interest to be
calculated from, and including, the due date to, but excluding,
the date paid and, in the event that the disputed amounts are
paid in full, any expense incurred by Buyer in resolving the
dispute.
(b) Sharing of Cost Savings. If at the end of the
three (3) year period following the Closing (the "Indemnity
Period") the total amount of costs and expenses incurred by Buyer
and reimbursed by Seller ("Indemnity Payment") is less than the
Indemnity Amount, Seller shall pay to Buyer,
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within thirty (30) days from the end of the Indemnity Period, an
amount equal to fifty US cents (US $0.50) for each dollar that
the Indemnity Amount exceeds the Indemnity Payment(s).
(c) Non-Power Dams. If the Non-Power Dams are not
transferred to the State of Vermont prior to the Closing, so long
as the Non-Power Dams are owned by Buyer, Seller shall indemnify
and hold harmless Buyer from and against any and all necessary
costs and expenses actually incurred by Buyer and directly
resulting from Buyer's ownership of the Non-Power Dams, including
all costs relating to (i) maintenance and repair for the Non-
Power Dams, (ii) compliance with applicable permits, licenses and
Orders (including the FERC License and the Water Quality
Certification issued by the Vermont Agency of Natural Resources,
dated August 1, 2002, as amended by the Amended Water Quality
Certification issued by the Vermont Water Resources Board, dated
July 11, 2003 and as may be further amended) relating to the
operation of Non-Power Dams, (iii) all filing fees, expenses and
attorneys' fees actually incurred in removing the Non-Power Dams
from the FERC license, (iv) all actions to quiet title relating
to real property comprising the Non-Power Dams, and (v) property
taxes relating to property comprising the Non-Power Dams.
(d) Disputes. All disputes arising pursuant to the
terms of this Section 12.2 shall be resolved pursuant to Section
13.6 of this Agreement.
Section 12.3 Indemnification by Buyer. From and after Closing
and subject to the other provisions of this Article 12, Buyer
shall indemnify and hold harmless Seller and its Representatives
(collectively, the "Seller Indemnitees") from and against any and
all Losses actually incurred by a Seller Indemnitee and directly
resulting from:
(a) any representations and warranties made by Buyer
in this Agreement not being true and correct when made or when
required by this Agreement to be true and correct, or any breach
or default by Buyer in the performance of its covenants,
agreements, or obligations under this Agreement required to be
performed prior to Closing;
(b) any breach or default by Buyer in the performance
of its covenants, agreements, or obligations under this Agreement
or any Related Document required to be performed after Closing;
and
(c) Buyer's operation or ownership of the Assets after
the Closing, including (but subject to Section 12.2) (i)
complying with the Water Quality Certification issued by the
Vermont Agency of Natural Resources, dated August 1, 2002, as
amended by the Amended Water Quality Certification issued by the
Vermont Water Resources Board, dated July 11, 2003, and as may be
further amended, (ii) retiring and/or dismantling any of the
Hydraulic Generating Facilities pursuant to any permits, licenses
or Orders, and (iii) dismantling any of the dams which constitute
part of the Hydraulic Generating Facilities pursuant to any
permits, licenses or Orders.
Section 12.4 No Consequential Damages. NOTWITHSTANDING
ANYTHING TO THE CONTRARY IN THIS AGREEMENT, IN NO EVENT SHALL
EITHER PARTY BE LIABLE TO THE OTHER PARTY OR THEIR INDEMNITEES
FOR ANY EXEMPLARY, PUNITIVE, SPECIAL, INDIRECT, CONSEQUENTIAL,
REMOTE OR SPECULATIVE DAMAGES.
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Section 12.5 Limitations on Liability. Notwithstanding
anything to the contrary in this Agreement, the respective
indemnification liabilities of the parties under this Agreement
and any documents delivered in connection herewith or
contemplated hereby shall be limited as follows:
(a) Except as otherwise provide in this Agreement, in
no event shall Seller indemnify the Buyer Indemnitees, or be
otherwise liable to the Buyer Indemnitees, for any Losses subject
to indemnification by Seller pursuant to Section 12.1(a) that in
the aggregate exceed an amount equal to Seven Hundred Fifty
Thousand Dollars ($750,000).
(b) The limitations on the indemnification of Seller
set forth in Section 12.5(a) shall not apply to any intentional
breach by Seller of any representation, warranty, covenant or
obligation (it being understood that the intentional failure by
Seller to disclose any specific item required to be disclosed
pursuant to any representation or warranty of Seller in this
Agreement shall constitute an intentional breach of such
representation and warranty and that the failure to cure a breach
shall not, by itself, be an intentional act or omission).
(c) In no event shall Buyer indemnify the Seller
Indemnitees, or be otherwise liable to the Seller Indemnitees,
for any Losses subject to indemnification by Seller pursuant to
Section 12.3(a) that in the aggregate exceed an amount equal to
Seven Hundred Fifty Thousand Dollars ($750,000).
(d) The limitations on the indemnification of Buyer
set forth in Section 12.5(c) shall not apply to any intentional
breach by Buyer of any representation, warranty, covenant or
obligation (it being understood that the intentional failure by
Buyer to disclose any specific item required to be disclosed
pursuant to any representation or warranty of Buyer in this
Agreement shall constitute an intentional breach of such
representation and warranty and that the failure to cure a breach
shall not, by itself, be an intentional act or omission).
(e) The representations, warranties, covenants and
agreements of the parties set forth in this Agreement shall
survive the Closing for the applicable period set forth below;
provided, however, that such indemnities shall survive with
respect only to the specific matters that are the subject of a
proper Claim Notice delivered in good faith in compliance with
the requirements of Section 12.7 until the earlier to occur of
(i) the date on which a final nonappealable resolution of a
disputed matter described in a proper Claim Notice has been
reached, or (ii) the date on which a disputed matter described in
a proper Claim Notice has otherwise reached final resolution.
(1) Except as otherwise provided in this
Agreement, all representations and warranties of Seller and
Buyer contained in or made pursuant to this Agreement, all
covenants, agreements or obligations of Seller and Buyer
contained in or made pursuant to this Agreement that are
required to be performed prior to Closing, and the related
indemnity obligations of Seller and Buyer contained in
Section 12.1(a) and (b) and 12.3(a) and (b), respectively,
shall survive Closing until and shall terminate on the
third (3rd) anniversary of the Closing Date.
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(2) The indemnity obligations of Seller
contained in Section 12.1 with respect to Taxes shall
survive until the expiration of the applicable statute of
limitations (or extensions or waivers thereof), except that
the obligations contained in Section 10.2 shall survive
until without time limit.
(3) The covenant and indemnity obligation set
forth in Section 12.2 shall survive Closing until the third
(3rd) anniversary of the Closing Date; provided, however,
that undisputed costs and expenses or matters subject to a
proper Claim Notice pursuant to Section 12.7 shall survive
until (i) the costs are paid, (ii) the date on which a
final nonappealable resolution of a disputed matter
described in a proper Claim Notice has been reached, or
(iii) the date on which a disputed matter described in a
proper Claim Notice has otherwise reached final resolution.
(4) The indemnity obligations of Seller
contained in Section 12.1 regarding any warranty of title
with respect to parcels of Real Property or any warranty or
representation of ownership of the Assets, shall survive
without time limit.
(5) The indemnity obligations of Seller
contained in Section 12.1(c) and of Buyer in Section
12.3(c) shall survive without time limit.
(f) Notwithstanding the foregoing, the parties
acknowledge that a party shall be entitled to indemnification by
the other party for Losses incurred by it with respect to any
intentional misrepresentation, omission or fraud by the other
party without any time limitation (it being understood that the
failure to cure a breach shall not, by itself, be an intentional
act or omission).
(g) Notwithstanding any language contained in any
Related Document (including deeds and other conveyance documents
relating to the Real Property), the representations and
warranties of Seller set forth in this Agreement will not be
merged into any such Related Document and the indemnification
obligations of Seller, and the limitations on such obligations,
set forth in this Agreement shall control. No provision set
forth in any such Related Document shall be deemed to enlarge,
alter or amend the terms or provisions of this Agreement.
(h) For the purposes of this Article 12, once a
determination has been made that a specific breach of a
representation, warranty, covenant or agreement has occurred for
purposes of the indemnification obligation hereunder, the
calculation of Losses with respect to such specific breach shall
be made without regard to any limitation or qualification as to
materiality set forth in such representation, warranty, covenant
or agreement.
Section 12.6 Insurance Coverage. Neither party shall have
liability for any claim or Loss that is covered by insurance
maintained by or for the benefit of either party or for which a
party recovers payments with respect to a Loss from any other
source (whether in a lump sum or stream of payments). No cost or
expense relating to any Loss shall be included in determining the
extent of Losses suffered by a party and their Indemnitees.
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The parties agree to use their commercially reasonable efforts to
give timely and effective written notice to the appropriate
insurance carrier(s) of any occurrence or circumstances which, in
the judgment of a party consistent with its customary risk
management practices, appear likely to give rise to a claim that
is likely to involve one or more insurance policies of that
party. Any notice shall be given in good faith without regard to
the possibility of indemnification payments and shall be
processed in good faith and in a manner consistent with its risk
management practices involving claims for which no third party
contractual indemnification is available. The parties agree that
(i) if it is entitled to receive payment for a Loss, and (ii) if
a party has obtained insurance which may cover the claim or
matter giving rise to a Loss, then (iii) its insurance shall be
primary coverage and that party will make a claim under its
insurance before enforcing its right to receive payment from the
other party. If at any time subsequent to the receipt of an
indemnity payment a party receives any recovery, settlement or
other similar payment with respect to the Loss for which it
receives an indemnity payment, that party shall promptly pay to
the other party an amount equal to the amount of the recovery,
less any expense incurred in connection with the recovery, but in
no event shall any payment exceed the amount of the indemnity
payment.
Section 12.7 Claims Procedure.
(a) If any Losses are asserted against or sought to be
collected by a third party from, or indemnifiable Losses are
otherwise incurred by, any Person claiming indemnification under
this Agreement (the "Indemnified Party"), the Indemnified Party
shall with reasonable promptness provide to the party against
whom such indemnification claims are asserted (the "Indemnifying
Party") a Claim Notice. The Indemnifying Party shall not be
obligated to indemnify the Indemnified Party with respect to any
Losses if the Indemnified Party fails to notify the Indemnifying
Party in accordance with the provisions of this Agreement in
reasonably sufficient time so that the Indemnifying Party's
ability to defend against the Losses is not prejudiced. The
Indemnifying Party shall have thirty (30) days from the personal
delivery or receipt of the Claim Notice (the "Notice Period") to
notify the Indemnified Party (i) whether or not it disputes the
liability of the Indemnifying Party to the Indemnified Party with
respect to such Losses, and/or (ii) whether or not it desires, at
the sole cost and expense of the Indemnifying Party, to defend
the Indemnified Party against such Losses provided, however, that
any Indemnified Party is authorized prior to and during the
Notice Period to file any motion, answer or other pleading that
it shall deem necessary or appropriate to protect its interests
or those of the Indemnifying Party (and of which it shall have
given notice and opportunity to comment to the Indemnifying
Party) and not prejudicial to the Indemnifying Party. If the
Indemnifying Party notifies the Indemnified Party within the
Notice Period that it desires to defend the Indemnified Party
against such Losses, the Indemnifying Party shall have the right
to defend all appropriate proceedings, and with counsel of its
own choosing, which proceedings shall be promptly settled or
prosecuted by them to a final conclusion. If the Indemnified
Party desires to participate in, but not control, any defense or
settlement it may do so at its sole cost and expense. If
requested by the Indemnifying Party, the Indemnified Party agrees
to cooperate with the Indemnifying Party and its counsel in
contesting any Losses that the Indemnifying Party elects to
contest or, if appropriate and related to the claim in question,
in making any counterclaim against the Person asserting the Third
party Losses; or any cross-complaint against any Person. No
claim may be settled or otherwise compromised without the prior
written consent of the Indemnifying Party.
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(b) The Indemnified Party shall provide reasonable
assistance to the Indemnifying Party and provide access to its
books, records and personnel as the Indemnifying Party reasonably
requests in connection with the investigation or defense of the
Losses. The Indemnifying Party shall promptly upon receipt of
reasonable supporting documentation reimburse the Indemnified
Party for costs and expenses incurred by the latter in providing
the requested assistance.
(c) With regard to third party claims for which Buyer
or Seller is entitled to indemnification under Section 12.1 or
12.3, such indemnification shall be paid by the Indemnifying
Party upon (i) the entry of an Order against the Indemnified
Party and the expiration of any applicable appeal period, or (ii)
a settlement with the prior written consent of the Indemnifying
Party, provided that no such consent need be obtained if the
Indemnifying Party fails to respond to the Claim Notice as
provided in Section 12.7(a). Notwithstanding the foregoing but
subject to Section 12.7(a), and provided that there is no dispute
as to the applicability of indemnification, expenses of counsel
to the Indemnified Party shall be reimbursed on a current basis
by the Indemnifying Party as if such expenses are a liability of
the Indemnifying Party.
Section 12.8 Exclusive Remedy. The rights, remedies and
obligations of the Buyer Indemnitees and the Seller Indemnitees
set forth in this Agreement will be the exclusive rights,
remedies and obligations of such Persons after the Closing with
respect to all post-Closing claims relating to this Agreement.
Section 12.9 Indemnification for Negligence. WITHOUT LIMITING
OR ENLARGING THE SCOPE OF THE INDEMNIFICATION OBLIGATIONS SET
FORTH IN THIS AGREEMENT, AN INDEMNIFIED PARTY SHALL BE ENTITLED
TO INDEMNIFICATION IN ACCORDANCE WITH THE TERMS HEREOF,
REGARDLESS OF WHETHER THE LOSS OR CLAIM GIVING RISE TO SUCH
INDEMNIFICATION OBLIGATION IS THE RESULT OF THE NEGLIGENCE,
STRICT LIABILITY, VIOLATION OF ANY LAW OR OTHER LEGAL FAULT OF OR
BY SUCH INDEMNIFIED PARTY. THE PARTIES AGREE THAT THIS PARAGRAPH
CONSTITUTES A CONSPICUOUS LEGEND.
ARTICLE 13
GENERAL PROVISIONS
Section 13.1 Expenses. Except as otherwise provide herein,
each Party will pay all costs and expenses of its performance of
and compliance with this Agreement, except Seller will pay all
real estate transfer Taxes and real estate recording fees.
Section 13.2 Notices. All notices, requests and other
communications hereunder shall be in writing and shall be deemed
to have been given upon receipt if either (i) personally
delivered, (ii) sent by prepaid first class mail, and registered
or certified and a return receipt requested, (iii) sent by
overnight delivery via a nationally recognized carrier, or (iv)
by facsimile with completed transmission acknowledged:
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If to Seller, to: If to Buyer, to:
Citizens Communications Great Bay Hydro Corporation
Company 0 Xxx Xxxxxxxxx Xxxxxx, Xxxxx
Xxxx Xxxxx Xxxx 125
Stamford, CT 06905 Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx Attention: Xxxxxxx X.
Xxxxxxxx Callendrello
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
with a copy to: with a copy to:
Citizens Communications McLane, Graf, Xxxxxxxxx &
Company Middleton,
High Ridge Park Professional Association
Xxxxxxxx, XX 00000 000 Xxx Xxxxxx
Attention: X. Xxxxxxx Xxxxxxxxxx, XX 00000
Mitten Attention: Xxxxxxx X. Xxxxxxx
Telecopier: (203) 614- Facsimile: (000) 000-0000
4651
or at such other address or number as shall be given in writing
by a party to the other party.
Section 13.3 Assignment. If this Agreement has not closed
prior to the date Seller closes its transaction with Vermont
Electric Cooperative, Inc., this Agreement may be assigned by
Seller to Vermont Electric Cooperative, Inc., otherwise this
Agreement may not be assigned by either party, by operation of
law or otherwise, except that Buyer may assign this Agreement to
another subsidiary of BayCorp Holdings, Ltd. without the prior
written consent of Seller provided such assignment would not
reasonably be expected to delay the Closing.
Section 13.4 Successor Bound. Subject to the provisions of
Section 13.3, this Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and
permitted assigns.
Section 13.5 Governing Law. The validity, performance, and
enforcement of this Agreement and all Related Documents, unless
expressly provided to the contrary, shall be governed by the laws
of the State of Vermont without giving effect to the principles
of conflicts of law of such state.
Section 13.6 Dispute Resolution. Except as otherwise provided
in this Agreement, any dispute, controversy or claim between the
parties relating to, arising out of or in connection with this
Agreement (or any subsequent agreements or amendments),
including, as to its existence, enforceability, validity,
interpretation, performance or breach or as to indemnification or
damages, including claims in tort, whether arising before or
after the termination of this Agreement (any such dispute
controversy or claim being referred to as a "Dispute") shall be
settled without litigation and only by use of the following
alternative dispute resolution procedure:
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(a) At the written request of a party, each party
shall appoint a knowledgeable, responsible representative to meet
and negotiate in good faith to resolve any Dispute. The
discussions shall be left to the discretion of the
representatives. Upon agreement, the representatives may utilize
other alternative dispute resolution procedures such as mediation
to assist in the negotiations. Discussions and correspondence
among the parties' representatives for purposes of these
negotiations shall be treated as confidential information
developed for the purposes of settlement, exempt from discovery
and production, and without the concurrence of both parties shall
not be admissible in the arbitration described below, or in any
lawsuit. Documents identified in or provided with such
communications, which are not prepared for purposes of the
negotiations, are not so exempted and may, if otherwise
admissible, be admitted in the arbitration.
(b) If negotiations between the representatives of the
parties do not resolve the Dispute within sixty (60) days of the
initial written request, the Dispute shall be submitted to
binding arbitration by a single arbitrator pursuant to the
arbitration rules, as then amended and in effect, of the
JAMS/Endispute (the "Rules"). Either party may demand such
arbitration in accordance with the procedures set out in the
Rules. The arbitrator shall be selected in accordance with the
Rules and shall be reasonably acceptable to both parties. The
arbitration shall take place in Burlington, Vermont. The
arbitration hearing shall be commenced within sixty (60) days of
such party's demand for arbitration properly submitted in
accordance with the Rules. The arbitrator shall have the power
to and will instruct each party to produce evidence through
discovery (i) that is reasonably requested by the other party to
the arbitration in order to prepare and substantiate its case,
and (ii) the production of which will not materially delay the
expeditious resolution of the dispute being arbitrated. The
arbitrator shall control the scheduling (so as to process the
matter expeditiously) and any discovery. Buyer and Seller shall
allow and participate in discovery according to the Federal Rules
of Civil Procedure and such rules shall control in the event of
any conflict between such rules and the Rules regarding
discovery. The arbitrator shall rule on unresolved discovery
disputes. Each party agrees to be bound by any discovery order
or other procedural ruling by the arbitrator. The parties may
submit written briefs. At the arbitration hearing, each party
may make written and oral presentations to the arbitrator,
present testimony and written evidence and examine witnesses. No
party shall be eligible to receive, and the arbitrator shall not
have the authority to award, exemplary or punitive damages. The
arbitrator shall rule on the Dispute by issuing a written opinion
within thirty (30) days after the close of hearings. The
arbitrator's decision shall be binding and final. Judgment upon
the award rendered by the arbitrator may be entered in any court
having jurisdiction.
(c) Each party will bear its own costs, and expenses
in submitting and presenting its position with respect to any
Dispute to the arbitrator and shall pay one-half of the fees and
expenses of the arbitrator and JAMS/Endispute; provided, however,
that if the arbitrator determines that the position taken in the
Dispute by the nonprevailing party taken as a whole is
unreasonable, the arbitrator may order the nonprevailing party to
bear such fees and expenses, and reimburse the prevailing party
for all or such portion of its reasonable costs and expenses in
submitting and presenting its position as the arbitrator shall
reasonably determine to be fair under the circumstances.
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(d) Notwithstanding any other provision of this
Agreement, (i) either party may commence an action to compel
compliance with this Section 13.6, and (ii) if any party, as part
of a Dispute, seeks injunctive relief or any other equitable
remedy, including specific enforcement, then such party shall be
permitted to seek such injunctive or equitable relief in any
federal or state court or competent jurisdiction before during or
after the pendency of a mediation or arbitration proceeding under
this Section 13.6.
Section 13.7 Cooperation. Each of the parties agrees to use
its commercially reasonable best efforts to take or cause to be
taken all action, and to do or cause to be done all things
necessary, proper or advisable under applicable laws, regulations
or otherwise, to consummate and to make effective the
transactions contemplated by this Agreement, including the timely
performance of all actions and things contemplated by this
Agreement to be taken or done by each of the parties.
Section 13.8 Construction of Agreement. The terms and
provisions of this Agreement represent the results of
negotiations between Buyer and Seller, each of which has been
represented by counsel of its own choosing, and neither of which
has acted under duress or compulsion, whether legal, economic or
otherwise. Accordingly, the terms and provisions of this
Agreement shall be interpreted and construed in accordance with
their usual and customary meanings, and Buyer and Seller each
waive the application in connection with the interpretation and
construction of this Agreement of any rule of law to the effect
that ambiguous or conflicting terms or provisions contained in
this Agreement shall be interpreted or construed against the
party whose attorney prepared the executed draft or any earlier
draft of this Agreement. It is understood and agreed that
neither the specification of any dollar amount in the
representations and warranties contained in this Agreement nor
the inclusion of any specific item in the Schedules or Exhibits
is intended to imply that such amounts or higher or lower
amounts, or the items so included or other items, are or are not
material, and none of the parties shall use the fact of the
setting of such amounts or the fact of any inclusion of any such
item in the Schedules or Exhibits in any dispute or controversy
between the parties as to whether any obligation, item or matter
is or is not material for purposes hereof. The word "including"
in this Agreement shall mean including without limitation. Words
in the singular shall be held to include the plural and vice
versa and words of one gender shall be held to include the other
genders as the context requires. The terms "hereof," "herein,"
and "herewith" and words of similar import shall, unless
otherwise stated, be construed to refer to this Agreement as a
whole (including all of the Schedules and Exhibits) and not to
any particular provision of this Agreement, and Article, Section,
paragraph, Exhibit and Schedule references are to the Articles,
Sections, paragraphs, Exhibits and Schedules to this Agreement
unless otherwise specified.
Section 13.9 Publicity. No party shall issue, make or cause
the publication of any press release or other announcement with
respect to this Agreement or the transactions contemplated
hereby, or otherwise make any disclosures, without the consent of
the other party, consent not to be unreasonably withheld or
delayed; provided, however, that consent shall not be required
where a release or announcement is required by applicable law or
the rules or regulations of a securities exchange, in which event
the party so required to issue a release or announcement shall
endeavor, wherever possible, to furnish an advance, copy of the
proposed release to the other party.
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Section 13.10 Waiver. Except as otherwise expressly provided in
this Agreement, neither the failure nor any delay on the part of
any party to exercise any right, power or privilege shall operate
as a waiver, nor shall any single or partial exercise or waiver
of any such right, power or privilege preclude any other or
further exercise, or the exercise of any other right, power or
privilege available to each party at law or in equity.
Section 13.11 Parties in Interest. This Agreement and the
attached Schedules and Exhibits (including the referenced
documents and instruments) are not intended to confer upon any
Person, other than the parties and their successors and permitted
assigns, any rights or remedies; provided, however, that the
indemnification provisions in Article 12 shall inure to the
benefit of the Buyer Indemnitees and the Seller Indemnitees.
Section 13.12 Section and Paragraph Headings. The section and
paragraph headings in this Agreement are for reference purposes
only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 13.13 Amendment. This Agreement may be amended only by
an instrument in writing executed by the parties.
Section 13.14 Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced
by any rule of law or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any
manner materially adverse to any party. Upon such determination
that any term or other provision is invalid, illegal or incapable
of being enforced, the parties shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end
that transactions contemplated hereby are fulfilled to the
greatest extent possible.
Section 13.15 Entire Agreement. This Agreement, the Exhibits
and Schedules and the referenced documents and instruments
constitute the entire agreement, understanding, representations
and warranties of the parties, and supersedes all prior
agreements, both written and oral, between Buyer and Seller. All
Exhibits and Schedules are hereby incorporated in and made a part
of this Agreement as if set forth in full herein. Disclosure of
any fact or item in any Schedule referenced by a particular
paragraph or Section in this Agreement shall, should the
existence of the fact or item or its contents be relevant to any
other paragraph or Section, be deemed to be disclosed with
respect to that other paragraph or Section whether or not any
explicit cross-reference appears therein.
Section 13.16 Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall be deemed an original,
and all of which together shall constitute one and the same
instrument.
Section 13.17 Specific Performance. Seller and Buyer agree that
in the event of any breach of any covenant, obligation or other
provision set forth in this Agreement, Buyer and Seller shall be
entitled to commence an action to seek to obtain an order for
specific performance or any other equitable remedy in any federal
or state court of competent jurisdiction to enforce the covenants
or obligations of the other party or Vermont Electric
Cooperative, Inc. as provided in Section 6.5.
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ACKNOWLEDGMENT OF ARBITRATION. THE PARTIES TO THIS AGREEMENT
UNDERSTAND THAT THIS AGREEMENT CONTAINS AN AGREEMENT OF THE
PARTIES TO ARBITRATE. AFTER SIGNING THIS DOCUMENT, THE PARTIES
UNDERSTAND THAT THEY WILL NOT BE ABLE TO BRING A LAWSUIT
CONCERNING ANY DISPUTE THAT MAY ARISE WHICH IS COVERED BY THE
AGREEMENT TO ARBITRATE, UNLESS IT INVOLVES A QUESTION OF
CONSTITUTIONAL OR CIVIL RIGHTS. INSTEAD, EACH PARTY AGREES TO
SUBMIT ANY SUCH DISPUTE TO AN IMPARTIAL ARBITRATOR.
IN WITNESS WHEREOF, the parties have executed and delivered
this Agreement as of the date first written above.
CITIZENS COMMUNICATIONS GREAT BAY HYDRO CORPORATION
COMPANY
By: /s/ Xxxxxxx Xxxxxxxx By: /s/ Xxxxx X. Xxxxxx Xx.
---------------------------- ---------------------------
Name: Xxxxxxx Xxxxxxxx Name: Xxxxx X. Xxxxxx Xx.
Title: Vice President Title: President
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Exhibits
Exhibit A - Guaranty of Performance
Exhibit B - Easements
Exhibit X-0 - Xxxxxxxxxxxxxxx Xxxxxxxxx
Xxxxxxx X-0 - Xxxx Xxxxx-xx-Xxxxx Transmission Service
Exhibit C-3 - Non-Firm Point-to-Point Transmission Service
Exhibit D - Xxxx of Sale
Schedules
Schedule 1.1 - Tangible Personal Property
Schedule 2.1 - Regulatory Proceedings
Schedule 4.3 - Buyer's Consents
Schedule 5.3 - Seller's Consents
Schedule 5.5 - Parcels of Real Property and all Easements
Schedule 5.6 - Legal Requirements and Governmental Permits
Schedule 5.7 - Pending or Threatened Proceedings
Schedule 5.10 - Contracts
Schedule 5.11 - Environmental Matters
Schedule 5.12 - Proceedings of State or Federal Regulatory
Commissions
Schedule 6.1(a) - Conduct Prior to Closing
Schedule 6.1(a)(2) - Repairs
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_______________________________
1 The intent is for the indemnification provided under this
Section 12.2 to cover costs incurred in order to bring the
Hydraulic Genrating Facilities into compliance with the FERC
License, not to cover ongoing or annual activities which are an
operational expense.
